Kerala tourism to cash in on relaxed FDI rules

11 April, 2008

The Kerala government’s plans to relax Foreign Direct Investment norms are expected to provide a new momentum for Kerala tourism. The central government is planning to introduce a proposal to further relax FDI norms to increase foreign investment in Kerala's hotel and tourism projects.

It is expected that the new proposal would help in attracting more investment to Kerala. The Department of Industrial Policy and Promotion has made out a case for more relaxation in FDI norms to give a boost to the hotel and tourism sector.

The existing FDI policy permits 100 per cent FDI in hotels and hospitals on a stand-alone basis. There are many foreign groups contemplating hotel projects in Kerala. Recently a major group in Sri Lanka had evinced interest in setting up a five star hotel project in Kerala. It is believed that while more investments are flowing to malls and shopping complexes in the state, the tourism sector would also benefit from this growth.

Kerala has already given shape for a roadmap to channelise domestic and foreign direct investment (FDI) in the tourism sector. The state government wants to project Kerala as an upmarket, high-quality tourist destination through the optimum utilisation of resources even while conserving and preserving heritage. The Kerala government has been working seriously to attract quality foreign investment in the tourism sector. It is expected that the new move would give further momentum to the booming market sentiment.